It's a big brief, this talk. Microsoft has sunk a lot of capital into DRM systems, and spent a lot of time sending folks like Martha and Brian and Peter around to various smoke-filled rooms to make sure that Microsoft DRM finds a hospitable home in the future world. Companies like Microsoft steer like old Buicks, and this issue has a lot of forward momentum that will be hard to soak up without driving the engine block back into the driver's compartment. At best I think that Microsoft might convert some of that momentum on DRM into angular momentum, and in so doing, save all our asses.

Let's dive into it.

Microsoft Research DRM talk

Cory Doctorow

cory@eff.org

June 17, 2004

This talk was originally given to Microsoft's Research Group
and other interested parties from within the company at their
Redmond offices on June 17, 2004.

--

This text is dedicated to the public domain, using a Creative
Commons public domain dedication:

> Copyright-Only Dedication (based on United States law)
>
> The person or persons who have associated their work with this
> document (the "Dedicator") hereby dedicate the entire copyright
> in the work of authorship identified below (the "Work") to the
> public domain.
>
> Dedicator makes this dedication for the benefit of the public at
> large and to the detriment of Dedicator's heirs and successors.
> Dedicator intends this dedication to be an overt act of
> relinquishment in perpetuity of all present and future rights
> under copyright law, whether vested or contingent, in the Work.
> Dedicator understands that such relinquishment of all rights
> includes the relinquishment of all rights to enforce (by lawsuit
> or otherwise) those copyrights in the Work.
>
> Dedicator recognizes that, once placed in the public domain, the
> Work may be freely reproduced, distributed, transmitted, used,
> modified, built upon, or otherwise exploited by anyone for any
> purpose, commercial or non-commercial, and in any way, including
> by methods that have not yet been invented or conceived.

--

Greetings fellow pirates! Arrrrr!

I'm here today to talk to you about copyright, technology and
DRM, I work for the Electronic Frontier Foundation on copyright
stuff (mostly), and I live in London. I'm not a lawyer -- I'm a
kind of mouthpiece/activist type, though occasionally they shave
me and stuff me into my Bar Mitzvah suit and send me to a
standards body or the UN to stir up trouble. I spend about three
weeks a month on the road doing completely weird stuff like going
to Microsoft to talk about DRM.

I lead a double life: I'm also a science fiction writer. That
means I've got a dog in this fight, because I've been dreaming of
making my living from writing since I was 12 years old.
Admittedly, my IP-based biz isn't as big as yours, but I
guarantee you that it's every bit as important to me as yours is
to you.

Here's what I'm here to convince you of:

1. That DRM systems don't work

2. That DRM systems are bad for society

3. That DRM systems are bad for business

4. That DRM systems are bad for artists

5. That DRM is a bad business-move for MSFT

It's a big brief, this talk. Microsoft has sunk a lot of capital
into DRM systems, and spent a lot of time sending folks like
Martha and Brian and Peter around to various smoke-filled rooms
to make sure that Microsoft DRM finds a hospitable home in the
future world. Companies like Microsoft steer like old Buicks, and
this issue has a lot of forward momentum that will be hard to
soak up without driving the engine block back into the driver's
compartment. At best I think that Microsoft might convert some of
that momentum on DRM into angular momentum, and in so doing, save
all our asses.

Let's dive into it.

--

1. DRM systems don't work

This bit breaks down into two parts:

1. A quick refresher course in crypto theory

2. Applying that to DRM

Cryptography -- secret writing -- is the practice of keeping
secrets. It involves three parties: a sender, a receiver and an
attacker (actually, there can be more attackers, senders and
recipients, but let's keep this simple). We usually call these
people Alice, Bob and Carol.

Let's say we're in the days of the Caesar, the Gallic
War. You need to send messages back and forth to your generals,
and you'd prefer that the enemy doesn't get hold of them. You can
rely on the idea that anyone who intercepts your message is
probably illiterate, but that's a tough bet to stake your empire
on. You can put your messages into the hands of reliable
messengers who'll chew them up and swallow them if captured --
but that doesn't help you if Brad Pitt and his men in skirts
skewer him with an arrow before he knows what's hit him.

So you encipher your message with something like ROT-13, where
every character is rotated halfway through the alphabet. They
used to do this with non-worksafe material on Usenet, back when
anyone on Usenet cared about work-safe-ness -- A would become N,
B is O, C is P, and so forth. To decipher, you just add 13 more,
so N goes to A, O to B yadda yadda.

Well, this is pretty lame: as soon as anyone figures out your
algorithm, your secret is g0nez0red.

So if you're Caesar, you spend a lot of time worrying about
keeping the existence of your messengers and their payloads
secret. Get that? You're Augustus and you need to send a message
to Brad without Caceous (a word I'm reliably informed means
"cheese-like, or pertaining to cheese") getting his hands on it.
You give the message to Diatomaceous, the fleetest runner in the
empire, and you encipher it with ROT-13 and send him out of the
garrison in the pitchest hour of the night, making sure no one
knows that you've sent it out. Caceous has spies everywhere, in
the garrison and staked out on the road, and if one of them puts
an arrow through Diatomaceous, they'll have their hands on the
message, and then if they figure out the cipher, you're b0rked.
So the existence of the message is a secret. The cipher is a
secret. The ciphertext is a secret. That's a lot of secrets, and
the more secrets you've got, the less secure you are, especially
if any of those secrets are shared. Shared secrets aren't really
all that secret any longer.

Time passes, stuff happens, and then Tesla invents the radio and
Marconi takes credit for it. This is both good news and bad news
for crypto: on the one hand, your messages can get to anywhere
with a receiver and an antenna, which is great for the brave
fifth columnists working behind the enemy lines. On the other
hand, anyone with an antenna can listen in on the message, which
means that it's no longer practical to keep the existence of the
message a secret. Any time Adolf sends a message to Berlin, he
can assume Churchill overhears it.

Which is OK, because now we have computers -- big, bulky
primitive mechanical computers, but computers still. Computers
are machines for rearranging numbers, and so scientists on both
sides engage in a fiendish competition to invent the most
cleverest method they can for rearranging numerically represented
text so that the other side can't unscramble it. The existence of
the message isn't a secret anymore, but the cipher is.

But this is still too many secrets. If Bobby intercepts one of
Adolf's Enigma machines, he can give Churchill all kinds of
intelligence. I mean, this was good news for Churchill and us,
but bad news for Adolf. And at the end of the day, it's bad news
for anyone who wants to keep a secret.

Enter keys: a cipher that uses a key is still more secure. Even
if the cipher is disclosed, even if the ciphertext is
intercepted, without the key (or a break), the message is secret.
Post-war, this is doubly important as we begin to realize what I
think of as Schneier's Law: "any person can invent a security
system so clever that she or he can't think of how to break it."
This means that the only experimental methodology for discovering
if you've made mistakes in your cipher is to tell all the smart
people you can about it and ask them to think of ways to break
it. Without this critical step, you'll eventually end up living
in a fool's paradise, where your attacker has broken your cipher
ages ago and is quietly decrypting all her intercepts of your
messages, snickering at you.

Best of all, there's only one secret: the key. And with dual-key
crypto it becomes a lot easier for Alice and Bob to keep their
keys secret from Carol, even if they've never met. So long as
Alice and Bob can keep their keys secret, they can assume that
Carol won't gain access to their cleartext messages, even though
she has access to the cipher and the ciphertext. Conveniently
enough, the keys are the shortest and simplest of the secrets,
too: hence even easier to keep away from Carol. Hooray for Bob
and Alice.

Now, let's apply this to DRM.

In DRM, the attacker is *also the recipient*. It's not Alice and
Bob and Carol, it's just Alice and Bob. Alice sells Bob a DVD.
She sells Bob a DVD player. The DVD has a movie on it -- say,
Pirates of the Caribbean -- and it's enciphered with an algorithm
called CSS -- Content Scrambling System. The DVD player has a CSS
un-scrambler.

Now, let's take stock of what's a secret here: the cipher is
well-known. The ciphertext is most assuredly in enemy hands, arrr.
So what? As long as the key is secret from the attacker, we're
golden.

But there's the rub. Alice wants Bob to buy Pirates of the
Caribbean from her. Bob will only buy Pirates of the Caribbean if
he can descramble the CSS-encrypted VOB -- video object -- on his
DVD player. Otherwise, the disc is only useful to Bob as a
drinks-coaster. So Alice has to provide Bob -- the attacker --
with the key, the cipher and the ciphertext.

Hilarity ensues.

DRM systems are broken in minutes, sometimes days. Rarely,
months. It's not because the people who think them up are stupid.
It's not because the people who break them are smart. It's not
because there's a flaw in the algorithms. At the end of the day,
all DRM systems share a common vulnerability: they provide their
attackers with ciphertext, the cipher and the key. At this point,
the secret isn't a secret anymore.

--

2. DRM systems are bad for society

Raise your hand if you're thinking something like, "But DRM
doesn't have to be proof against smart attackers, only average
individuals! It's like a speedbump!"

Put your hand down.

This is a fallacy for two reasons: one technical, and one social.
They're both bad for society, though.

Here's the technical reason: I don't need to be a cracker to
break your DRM. I only need to know how to search Google, or
Kazaa, or any of the other general-purpose search tools for the
cleartext that someone smarter than me has extracted.

Raise your hand if you're thinking something like, "But NGSCB can
solve this problem: we'll lock the secrets up on the logic board
and goop it all up with epoxy."

Put your hand down.

Raise your hand if you're a co-author of the Darknet paper.

Everyone in the first group, meet the co-authors of the Darknet
paper. This is a paper that says, among other things, that DRM
will fail for this very reason. Put your hands down, guys.

Here's the social reason that DRM fails: keeping an honest user
honest is like keeping a tall user tall. DRM vendors tell us that
their technology is meant to be proof against average users, not
organized criminal gangs like the Ukranian pirates who stamp out
millions of high-quality counterfeits. It's not meant to be proof
against sophisticated college kids. It's not meant to be proof
against anyone who knows how to edit her registry, or hold down
the shift key at the right moment, or use a search engine. At the
end of the day, the user DRM is meant to defend against is the
most unsophisticated and least capable among us.

Here's a true story about a user I know who was stopped by DRM.
She's smart, college educated, and knows nothing about
electronics. She has three kids. She has a DVD in the living room
and an old VHS deck in the kids' playroom. One day, she brought
home the Toy Story DVD for the kids. That's a substantial
investment, and given the generally jam-smeared character of
everything the kids get their paws on, she decided to tape the
DVD off to VHS and give that to the kids -- that way she could
make a fresh VHS copy when the first one went south. She cabled
her DVD into her VHS and pressed play on the DVD and record on
the VCR and waited.

Before I go farther, I want us all to stop a moment and marvel at
this. Here is someone who is practically technophobic, but who
was able to construct a mental model of sufficient accuracy that
she figured out that she could connect her cables in the right
order and dub her digital disc off to analog tape. I imagine that
everyone in this room is the front-line tech support for someone
in her or his family: would it be great if all our non-geek
friends and relatives were this clever and imaginative?

I also want to point out that this is the proverbial honest user.
She's not making a copy for the next door neighbors. She's not
making a copy and selling it on a blanket on Canal Street. She's
not ripping it to her hard-drive, DivX encoding it and putting it
in her Kazaa sharepoint. She's doing something *honest* -- moving
it from one format to another. She's home taping.

Except she fails. There's a DRM system called Macrovision
embedded -- by law -- in every DVD player and VHS that messes
with the vertical blanking interval in the signal and causes any
tape made in this fashion to fail. Macrovision can be defeated
for about $10 with a gadget readily available on eBay. But our
infringer doesn't know that. She's "honest." Technically
unsophisticated. Not stupid, mind you -- just naive.

The Darknet paper addresses this possibility: it even predicts
what this person will do in the long run: she'll find out about
Kazaa and the next time she wants to get a movie for the kids,
she'll download it from the net and burn it for them.

In order to delay that day for as long as possible, our lawmakers
and big rightsholder interests have come up with a disastrous
policy called anticircumvention.

Here's how anticircumvention works: if you put a lock -- an
access control -- around a copyrighted work, it is illegal to
break that lock. It's illegal to make a tool that breaks that
lock. It's illegal to tell someone how to make that tool. It's
illegal to tell someone where she can find out how to make that
tool.

Remember Schneier's Law? Anyone can come up with a security
system so clever that he can't see its flaws. The only way to
find the flaws in security is to disclose the system's workings
and invite public feedback. But now we live in a world where any
cipher used to fence off a copyrighted work is off-limits to that
kind of feedback. That's something that a Princeton engineering
prof named Ed Felten discovered when he submitted a paper to an
academic conference on the failings in the Secure Digital Music
Initiative, a watermarking scheme proposed by the recording
industry. The RIAA responded by threatening to sue his ass if he
tried it. We fought them because Ed is the kind of client that
impact litigators love: unimpeachable and clean-cut and the RIAA
folded. Lucky Ed. Maybe the next guy isn't so lucky.

Matter of fact, the next guy wasn't. Dmitry Skylarov is a Russian
programmer who gave a talk at a hacker con in Vegas on the
failings in Adobe's e-book locks. The FBI threw him in the slam
for 30 days. He copped a plea, went home to Russia, and the
Russian equivalent of the State Department issued a blanket
warning to its researchers to stay away from American
conferences, since we'd apparently turned into the kind of
country where certain equations are illegal.

Anticircumvention is a powerful tool for people who want to
exclude competitors. If you claim that your car engine firmware
is a "copyrighted work," you can sue anyone who makes a tool for
interfacing with it. That's not just bad news for mechanics --
think of the hotrodders who want to chip their cars to tweak the
performance settings. We have companies like Lexmark claiming
that their printer cartridges contain copyrighted works --
software that trips an "I am empty" flag when the toner runs out,
and have sued a competitor who made a remanufactured cartridge
that reset the flag. Even garage-door opener companies have
gotten in on the act, claiming that their receivers' firmware are
copyrighted works. Copyrighted cars, print carts and garage-door
openers: what's next, copyrighted light-fixtures?

Even in the context of legitimate -- excuse me, "traditional" --
copyrighted works like movies on DVDs, anticircumvention is bad
news. Copyright is a delicate balance. It gives creators and
their assignees some rights, but it also reserves some rights to
the public. For example, an author has no right to prohibit
anyone from transcoding his books into assistive formats for the
blind. More importantly, though, a creator has a very limited say
over what you can do once you lawfully acquire her works. If I
buy your book, your painting, or your DVD, it belongs to me. It's
my property. Not my "intellectual property" -- a whacky kind of
pseudo-property that's swiss-cheesed with exceptions, easements
and limitations -- but real, no-fooling, actual tangible
*property* -- the kind of thing that courts have been managing
through tort law for centuries.

But anticirumvention lets rightsholders invent new and exciting
copyrights for themselves -- to write private laws without
accountability or deliberation -- that expropriate your interest
in your physical property to their favor. Region-coded DVDs are
an example of this: there's no copyright here or in anywhere I
know of that says that an author should be able to control where
you enjoy her creative works, once you've paid for them. I can
buy a book and throw it in my bag and take it anywhere from
Toronto to Timbuktu, and read it wherever I am: I can even buy
books in America and bring them to the UK, where the author may
have an exclusive distribution deal with a local publisher who
sells them for double the US shelf-price. When I'm done with it,
I can sell it on or give it away in the UK. Copyright lawyers
call this "First Sale," but it may be simpler to think of it as
"Capitalism."

The keys to decrypt a DVD are controlled by an org called
DVD-CCA, and they have a bunch of licensing requirements for
anyone who gets a key from them. Among these is something called
region-coding: if you buy a DVD in France, it'll have a flag set
that says, "I am a French DVD." Bring that DVD to America and
your DVD player will compare the flag to its list of permitted
regions, and if they don't match, it will tell you that it's not
allowed to play your disc.

Remember: there is no copyright that says that an author gets to
do this. When we wrote the copyright statutes and granted authors
the right to control display, performance, duplication,
derivative works, and so forth, we didn't leave out "geography"
by accident. That was on-purpose.

So when your French DVD won't play in America, that's not because
it'd be illegal to do so: it's because the studios have invented
a business-model and then invented a copyright law to prop it up.
The DVD is your property and so is the DVD player, but if you
break the region-coding on your disc, you're going to run afoul
of anticircumvention.

That's what happened to Jon Johansen, a Norweigan teenager who
wanted to watch French DVDs on his Norweigan DVD player. He and
some pals wrote some code to break the CSS so that he could do
so. He's a wanted man here in America; in Norway the studios put
the local fuzz up to bringing him up on charges of *unlawfully
trespassing upon a computer system.* When his defense asked,
"Which computer has Jon trespassed upon?" the answer was: "His
own."

His no-fooling, real and physical property has been expropriated
by the weird, notional, metaphorical intellectual property on his
DVD: DRM only works if your record player becomes the property of
whomever's records you're playing.

--

3. DRM systems are bad for biz

This is the worst of all the ideas embodied by DRM: that people
who make record-players should be able to spec whose records you
can listen to, and that people who make records should have a
veto over the design of record-players.

We've never had this principle: in fact, we've always had just
the reverse. Think about all the things that can be plugged into
a parallel or serial interface, which were never envisioned by
their inventors. Our strong economy and rapid innovation are
byproducts of the ability of anyone to make anything that plugs
into anything else: from the Flo-bee electric razor that snaps
onto the end of your vacuum-hose to the octopus spilling out of
your car's dashboard lighter socket, standard interfaces that
anyone can build for are what makes billionaires out of nerds.

The courts affirm this again and again. It used to be illegal to
plug anything that didn't come from AT&T into your phone-jack.
They claimed that this was for the safety of the network, but
really it was about propping up this little penny-ante racket
that AT&T had in charging you a rental fee for your phone until
you'd paid for it a thousand times over.

When that ban was struck down, it created the market for
third-party phone equipment, from talking novelty phones to
answering machines to cordless handsets to headsets -- billions
of dollars of economic activity that had been supressed by the
closed interface. Note that AT&T was one of the big beneficiaries
of this: they *also* got into the business of making phone-kit.

DRM is the software equivalent of these closed hardware
interfaces. Robert Scoble is a Softie who has an excellent blog,
where he wrote an essay about the best way to protect your
investment in the digital music you buy. Should you buy Apple
iTunes music, or Microsoft DRM music? Scoble argued that
Microsoft's music was a sounder investment, because Microsoft
would have more downstream licensees for its proprietary format
and therefore you'd have a richer ecosystem of devices to choose
from when you were shopping for gizmos to play your virtual
records on.

What a weird idea: that we should evaluate our record-purchases
on the basis of which recording company will allow the greatest
diversity of record-players to play its discs! That's like
telling someone to buy the Betamax instead of the Edison
Kinetoscope because Thomas Edison is a crank about licensing his
patents; all the while ignoring the world's relentless march to
the more open VHS format.

It's a bad business. DVD is a format where the guy who makes the
records gets to design the record players. Ask yourself: how much
innovation has there been over the past decade of DVD players?
They've gotten cheaper and smaller, but where are the weird and
amazing new markets for DVD that were opened up by the VCR?
There's a company that's manufacturing the world's first
HDD-based DVD jukebox, a thing that holds 30 movies, and they're
charging *$30,000* for this thing. We're talking about a $300
hard drive and a $300 PC -- all that other cost is the cost of
anticompetition.

--

4. DRM systems are bad for artists

But what of the artist? The hardworking filmmaker, the
ink-stained scribbler, the heroin-cured leathery rock-star? We
poor slobs of the creative class are everyone's favorite
poster-children here: the RIAA and MPAA hold us up and say,
"Won't someone please think of the children?" File-sharers say,
"Yeah, we're thinking about the artists, but the labels are The
Man, who cares what happens to you?"

To understand what DRM does to artists, you need to understand
how copyright and technology interact. Copyright is inherently
technological, since the things it addresses -- copying,
transmitting, and so on -- are inherently technological.

The piano roll was the first system for cheaply copying music. It
was invented at a time when the dominant form of entertainment in
America was getting a talented pianist to come into your living
room and pound out some tunes while you sang along. The music
industry consisted mostly of sheet-music publishers.

The player piano was a digital recording and playback system.
Piano-roll companies bought sheet music and ripped the notes
printed on it into 0s and 1s on a long roll of computer tape,
which they sold by the thousands -- the hundreds of thousands --
the millions. They did this without a penny's compensation to the
publishers. They were digital music pirates. Arrrr!

Predictably, the composers and music publishers went nutso. Sousa
showed up in Congress to say that:

These talking machines are going to ruin the
artistic development of music in this
country. When I was a boy...in front of every
house in the summer evenings, you would find
young people together singing the songs of
the day or old songs. Today you hear these
infernal machines going night and day. We
will not have a vocal chord left. The vocal
chord will be eliminated by a process of
evolution, as was the tail of man when he
came from the ape.

The publishers asked Congress to ban the piano roll and to create
a law that said that any new system for reproducing music should
be subject to a veto from their industry association. Lucky for
us, Congress realized what side of their bread had butter on it
and decided not to criminalize the dominant form of entertainment
in America.

But there was the problem of paying artists. The Constitution
sets out the purpose of American copyright: to promote the useful
arts and sciences. The composers had a credible story that they'd
do less composing if they weren't paid for it, so Congress needed
a fix. Here's what they came up with: anyone who paid a music
publisher two cents would have the right to make one piano roll
of any song that publisher published. The publisher couldn't say
no, and no one had to hire a lawyer at $200 an hour to argue
about whether the payment should be two cents or a nickel.

This compulsory license is still in place today: when Joe Cocker
sings "With a Little Help from My Friends," he pays a fixed fee
to the Beatles' publisher and away he goes -- even if Ringo hates
the idea. If you ever wondered how Sid Vicious talked Anka into
letting him get a crack at "My Way," well, now you know.

That compulsory license created a world where a thousand times
more money was made by a thousand times more creators who made a
thousand times more music that reached a thousand times more
people.

This story repeats itself throughout the technological century,
every ten or fifteen years. Radio was enabled by a voluntary
blanket license -- the music companies got together and asked for
an antitrust exemption so that they could offer all their music
for a flat fee. Cable TV took a compulsory: the only way cable
operators could get their hands on broadcasts was to pirate them
and shove them down the wire, and Congress saw fit to legalize
this practice rather than screw around with their constituents'
TVs.

Sometimes, the courts and Congress decided to simply take away a
copyright -- that's what happened with the VCR. When Sony brought
out the VCR in 1976, the studios had already decided what the
experience of watching a movie in your living room would look
like: they'd licensed out their programming for use on a machine
called a Discovision, which played big LP-sized discs that
disintegrated after a few plays. Proto-DRM.

The copyright scholars of the day didn't give the VCR very good
odds. Sony argued that their box allowed for a fair use, which is
defined as a use that a court rules is a defense against
infringement based on four factors: whether the use transforms
the work into something new, like a collage; whether it uses all
or some of the work; whether the work is artistic or mainly
factual; and whether the use undercuts the creator's
business-model.

The Betamax failed on all four fronts: when you time-shifted or
duplicated a Hollywood movie off the air, you made a
non-transformative use of 100 percent of a creative work in a way
that directly undercut the Discovision licensing stream.

Jack Valenti, the mouthpiece for the motion-picture industry,
told Congress in 1982 that the VCR was to the American film
industry "as the Boston Strangler is to a woman home alone."

But the Supreme Court ruled against Hollywood in 1984, when it
determined that any device capable of a substantial
non-infringing use was legal. In other words, "We don't buy this
Boston Strangler business: if your business model can't survive
the emergence of this general-purpose tool, it's time to get
another business-model or go broke."

Hollywood found another business model, as the broadcasters had,
as the Vaudeville artists had, as the music publishers had, and
they made more art that paid more artists and reached a wider
audience.

There's one thing that every new art business-model had in
common: it embraced the medium it lived in.

This is the overweening characteristic of every single successful
new medium: it is true to itself. The Luther Bible didn't
succeed on the axes that made a hand-copied monk Bible valuable:
they were ugly, they weren't in Church Latin, they weren't read
aloud by someone who could interpret it for his lay audience,
they didn't represent years of devoted-with-a-capital-D labor by
someone who had given his life over to God. The thing that made
the Luther Bible a success was its scalability: it was more
popular because it was more proliferate: all success factors for
a new medium pale beside its profligacy. The most successful
organisms on earth are those that reproduce the most: bugs and
bacteria, nematodes and virii. Reproduction is the best of all
survival strategies.

Piano rolls didn't sound as good as the music of a skilled
pianist: but they *scaled better*. Radio lacked the social
elements of live performance, but more people could build a
crystal set and get it aimed correctly than could pack into even
the largest Vaudeville house. MP3s don't come with liner notes,
they aren't sold to you by a hipper-than-thou record store clerk
who can help you make your choice, bad rips and truncated files
abound: I once downloaded a twelve-second copy of "Hey Jude" from
the original Napster. Yet MP3 is outcompeting the CD. I don't
know what to do with CDs anymore: I get them, and they're like
the especially garment bag they give you at the fancy suit shop:
it's nice and you feel like a goof for throwing it out, but
Christ, how many of these things can you usefully own? I can put
ten thousand songs on my laptop, but a comparable pile of discs,
with liner notes and so forth -- that's a liability: it's a piece
of my monthly storage-locker costs.

Here are the two most important things to know about computers
and the Internet:

1. A computer is a machine for rearranging bits

2. The Internet is a machine for moving bits from one place to
another very cheaply and quickly

Any new medium that takes hold on the Internet and with computers
will embrace these two facts, not regret them. A newspaper press
is a machine for spitting out cheap and smeary newsprint at
speed: if you try to make it output fine art lithos, you'll get
junk. If you try to make it output newspapers, you'll get the
basis for a free society.

And so it is with the Internet. At the heyday of Napster, record
execs used to show up at conferences and tell everyone that
Napster was doomed because no one wanted lossily compressed MP3s
with no liner notes and truncated files and misspelled metadata.

Today we hear ebook publishers tell each other and anyone who'll
listen that the barrier to ebooks is screen resolution. It's
bollocks, and so is the whole sermonette about how nice a book
looks on your bookcase and how nice it smells and how easy it is
to slip into the tub. These are obvious and untrue things, like
the idea that radio will catch on once they figure out how to
sell you hotdogs during the intermission, or that movies will
really hit their stride when we can figure out how to bring the
actors out for an encore when the film's run out. Or that what
the Protestant Reformation really needs is Luther Bibles with
facsimile illumination in the margin and a rent-a-priest to read
aloud from your personal Word of God.

New media don't succeed because they're like the only media, only
better: they succeed because they're worse than the old media at
the stuff the old media is good at, and better at the stuff the
old media are bad at. Books are good at being paperwhite,
high-resolution, low-infrastructure, cheap and disposable. Ebooks
are good at being everywhere in the world at the same time for
free in a form that is so malleable that you can just pastebomb
it into your IM session or turn it into a page-a-day mailing
list.

The only really successful epublishing -- I mean, hundreds of
thousands, millions of copies distributed and read -- is the
bookwarez scene, where scanned-and-OCR'd books are distributed on
the darknet. The only legit publishers with any success at
epublishing are the ones whose books cross the Internet without
technological fetter: publishers like Baen Books and my own, Tor,
who are making some or all of their catalogs available in ASCII
and HTML and PDF.

The hardware-dependent ebooks, the DRM use-and-copy-restricted
ebooks, they're cratering. Sales measured in the tens, sometimes
the hundreds. Science fiction is a niche business, but when
you're selling copies by the ten, that's not even a business,
it's a hobby.

Every one of you has been riding a curve where you read more and
more words off of more and more screens every day through most of
your professional careers. It's zero-sum: you've also been
reading fewer words off of fewer pages as time went by: the
dinosauric executive who prints his email and dictates a reply to
his secretary is info-roadkill.

Today, at this very second, people read words off of screens for
every hour that they can find. Your kids stare at their Game Boys
until their eyes fall out. Euroteens ring doorbells with their
hypertrophied, SMS-twitching thumbs instead of their index
fingers.

Paper books are the packaging that books come in. Cheap
printer-binderies like the Internet Bookmobile that can produce a
full bleed, four color, glossy cover, printed spine,
perfect-bound book in ten minutes for a dollar are the future of
paper books: when you need an instance of a paper book, you
generate one, or part of one, and pitch it out when you're done.
I landed at SEA-TAC on Monday and burned a couple CDs from my
music collection to listen to in the rental car. When I drop the
car off, I'll leave them behind. Who needs 'em?

Whenever a new technology has disrupted copyright, we've changed
copyright. Copyright isn't an ethical proposition, it's a
utlititarian one. There's nothing *moral* about paying a composer
tuppence for the piano-roll rights, there's nothing *immoral*
about not paying Hollywood for the right to videotape a movie off
your TV. They're just the best way of balancing out so that
people's physical property rights in their VCRs and phonographs
are respected and so that creators get enough of a dangling
carrot to go on making shows and music and books and paintings.

Technology that disrupts copyright does so because it simplifies
and cheapens creation, reproduction and distribution. The
existing copyright businesses exploit inefficiencies in the old
production, reproduction and distribution system, and they'll be
weakened by the new technology. But new technology always gives
us more art with a wider reach: that's what tech is *for*.

Tech gives us bigger pies that more artists can get a bite out
of. That's been tacitly acknowledged at every stage of the
copyfight since the piano roll. When copyright and technology
collide, it's copyright that changes.

Which means that today's copyright -- the thing that DRM
nominally props up -- didn't come down off the mountain on two
stone tablets. It was created in living memory to accommodate the
technical reality created by the inventors of the previous
generation. To abandon invention now robs tomorrow's artists of
the new businesses and new reach and new audiences that the
Internet and the PC can give them.

--

5. DRM is a bad business-move for MSFT

When Sony brought out the VCR, it made a record player that could
play Hollywood's records, even if Hollywood didn't like the idea.
The industries that grew up on the back of the VCR -- movie
rentals, home taping, camcorders, even Bar Mitzvah videographers
-- made billions for Sony and its cohort.

That was good business -- even if Sony lost the Betamax-VHS
format wars, the money on the world-with-VCRs table was enough to
make up for it.

But then Sony acquired a relatively tiny entertainment company
and it started to massively screw up. When MP3 rolled around and
Sony's walkman customers were clamoring for a solid-state MP3
player, Sony let its music business-unit run its show: instead of
making a high-capacity MP3 walkman, Sony shipped its Music Clips,
low-capacity devices that played brain-damaged DRM formats like
Real and OpenAG. They spent good money engineering "features"
into these devices that kept their customers from freely moving
their music back and forth between their devices. Customers
stayed away in droves.

Today, Sony is dead in the water when it comes to walkmen. The
market leaders are poky Singaporean outfits like Creative Labs --
the kind of company that Sony used to crush like a bug, back
before it got borged by its entertainment unit -- and PC
companies like Apple.

That's because Sony shipped a product that there was no market
demand for. No Sony customer woke up one morning and said, "Damn,
I wish Sony would devote some expensive engineering effort in
order that I may do less with my music." Presented with an
alternative, Sony's customers enthusiastically jumped ship.

The same thing happened to a lot of people I know who used to rip
their CDs to WMA. You guys sold them software that produced
smaller, better-sounding rips that the MP3 rippers, but you also
fixed it so that the songs you ripped were device-locked to their
PCs. What that meant is that when they backed up their music to
another hard-drive and reinstalled their OS (something that the
spyware and malware wars has made more common than ever), they
discovered that after they restored their music that they could
no longer play it. The player saw the new OS as a different
machine, and locked them out of their own music.

There is no market demand for this "feature." None of your
customers want you to make expensive modifications to your
products that make backing up and restoring even harder. And
there is no moment when your customers will be less forgiving
than the moment that they are recovering from catastrophic
technology failures.

I speak from experience. Because I buy a new Powerbook every ten
months, and because I always order the new models the day they're
announced, I get a lot of lemons from Apple. That means that I
hit Apple's three-iTunes-authorized-computers limit pretty early
on and found myself unable to play the hundreds of dollars' worth
of iTunes songs I'd bought because one of my authorized machines
was a lemon that Apple had broken up for parts, one was in the
shop getting fixed by Apple, and one was my mom's computer, 3,000
miles away in Toronto.

If I had been a less good customer for Apple's hardware, I would
have been fine. If I had been a less enthusiastic evangelist for
Apple's products -- if I hadn't shown my mom how iTunes Music
Store worked -- I would have been fine. If I hadn't bought so
much iTunes music that burning it to CD and re-ripping it and
re-keying all my metadata was too daunting a task to consider, I
would have been fine.

As it was Apple rewarded my trust, evangelism and out-of-control
spending by treating me like a crook and locking me out of my own
music, at a time when my Powerbook was in the shop -- i.e., at a
time when I was hardly disposed to feel charitable to Apple.

I'm an edge case here, but I'm a *leading edge* case. If Apple
succeeds in its business plans, it will only be a matter of time
until even average customers have upgraded enough hardware and
bought enough music to end up where I am.

You know what I would totally buy? A record player that let me
play everybody's records. Right now, the closest I can come to
that is an open source app called VLC, but it's clunky and buggy
and it didn't come pre-installed on my computer.

Sony didn't make a Betamax that only played the movies that
Hollywood was willing to permit -- Hollywood asked them to do it,
they proposed an early, analog broadcast flag that VCRs could
hunt for and respond to by disabling recording. Sony ignored them
and made the product they thought their customers wanted.

I'm a Microsoft customer. Like millions of other Microsoft
customers, I want a player that plays anything I throw at it, and
I think that you are just the company to give it to me.

Yes, this would violate copyright law as it stands, but Microsoft
has been making tools of piracy that change copyright law for
decades now. Outlook, Exchange and MSN are tools that abet
widescale digital infringement.

More significantly, IIS and your caching proxies all make and
serve copies of documents without their authors' consent,
something that, if it is legal today, is only legal because
companies like Microsoft went ahead and did it and dared
lawmakers to prosecute.

Microsoft stood up for its customers and for progress, and won so
decisively that most people never even realized that there was a
fight.

Do it again! This is a company that looks the world's roughest,
toughest anti-trust regulators in the eye and laughs. Compared to
anti-trust people, copyright lawmakers are pantywaists. You can
take them with your arm behind your back.

In Siva Vaidhyanathan's book The Anarchist in the Library, he
talks about why the studios are so blind to their customers'
desires. It's because people like you and me spent the 80s and
the 90s telling them bad science fiction stories about impossible
DRM technology that would let them charge a small sum of money
every time someone looked at a movie -- want to fast-forward?
That feature costs another penny. Pausing is two cents an hour.
The mute button will cost you a quarter.

When Mako Analysis issued their report last month advising phone
companies to stop supporting Symbian phones, they were just
writing the latest installment in this story. Mako says that
phones like my P900, which can play MP3s as ringtones, are bad
for the cellphone economy, because it'll put the extortionate
ringtone sellers out of business. What Mako is saying is that
just because you bought the CD doesn't mean that you should
expect to have the ability to listen to it on your MP3 player,
and just because it plays on your MP3 player is no reason to
expect it to run as a ringtone. I wonder how they feel about
alarm clocks that will play a CD to wake you up in the morning?
Is that strangling the nascent "alarm tone" market?

The phone companies' customers want Symbian phones and for now,
at least, the phone companies understand that if they don't sell
them, someone else will.

The market opportunity for a truly capable devices is enormous.
There's a company out there charging *$30,000* for a $600 DVD
jukebox -- go and eat their lunch! Steve Jobs isn't going to do
it: he's off at the D conference telling studio execs not to
release hi-def movies until they're sure no one will make a
hi-def DVD burner that works with a PC.

Maybe they won't buy into his BS, but they're also not much
interested in what you have to sell. At the Broadcast Protection
Discussion Group meetings where the Broadcast Flag was hammered
out, the studios' position was, "We'll take anyone's DRM except
Microsoft's and Philips'." When I met with UK broadcast wonks
about the European version of the Broadcast Flag underway at the
Digital Video Broadcasters' forum, they told me, "Well, it's
different in Europe: mostly they're worried that some American
company like Microsoft will get their claws into European
television."

American film studios didn't want the Japanese electronics
companies to get a piece of the movie pie, so they fought the
VCR. Today, everyone who makes movies agrees that they don't want
to let you guys get between them and their customers.

Sony didn't get permission. Neither should you. Go build the
record player that can play everyone's records.

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